July 29, 2005

Senate expected to approve energy bill

by ssavage

By Julie Vorman

WASHINGTON (Reuters) - The U.S. Senate was poised on Friday
to approve a $14.5 billion energy bill that is championed by
the White House as a way to increase U.S. supplies and reduce
demand but criticized by environmental groups.

Environmental groups and some Democrats criticize its
extensive tax breaks, subsidies and loan guarantees as a lavish
gift to an industry enjoying near-record profits.

The Senate was scheduled to vote on Friday on the energy
bill, following the lead of the House of Representatives that
approved it by a wide margin on Thursday.

President Bush -- who spent the past four years pressing
Congress to overhaul U.S. energy policy -- was expected to sign
it into law soon afterward.

The bill will have no short-term impact on gasoline prices
or oil imports, Republicans acknowledged. But longer term, they
said it would revitalize all types of energy production.

"For once, Congress and the United States are going to do
something important that we will benefit from, not tomorrow,
but for the next five or 10 years," said Republican Pete
Domenici of New Mexico, one of the bill's authors.

Most Americans will feel the impact of the 1,700-page bill
when daylight-saving time is extended by two weeks in 2007 to
save energy. Homeowners will also be able to claim a tax credit
of up to $500 to install more energy-efficient windows, and
another modest credit for buying a hybrid fuel vehicle.

COAL, OIL, NUCLEAR ARE BIG WINNERS

The bulk of the bill's incentives are aimed at companies
and utilities that produce energy.

Of the total $14.5 billion, $2.6 billion is in tax breaks
for oil and gas drilling and the expansion of pipelines and
refineries. Electric utilities are in line to get $3.1 billion
in tax credits and subsidies to build the first nuclear power
plants since the 1979 Three Mile Island accident.

Coal companies will get $2.9 billion to invest in new
technology to generate gas or electricity with less air
pollution. About $3.1 billion is earmarked for tax credits for
renewable energy sources such as wind, biomass, geothermal,
landfill gas and hydropower.

The bill also orders the U.S. oil industry to nearly double
the amount of corn-distilled ethanol it uses as an additive in
gasoline, giving farmers a new market for their crop.

Energy Secretary Sam Bodman said the package "will reduce
energy demand, increase energy supplies, and update our aging
energy infrastructure." It will also promote "research and
development efforts to transform that way we produce and use
energy in the future," he added.

Some Senate Democrats said they would reluctantly vote for
the bill even though it fell far short of steering the nation
on a new energy course.

The legislation failed to curb oil demand with stricter
fuel mileage for gas guzzlers or encourage more renewable forms
of energy, said Democrat John Kerry of Massachusetts, his
party's 2004 presidential nominee.

"What we need is an energy policy that is as bold and as
big as the challenge is to the country. That is not what we are
getting in this bill," Kerry said. "This does nothing to reduce
American dependence on foreign oil."

The U.S. oil addiction means the nation must import 60
percent of the 21 million barrels per day consumed.